Germany and France – which have announced plans to save the currency union, and both have top notch triple-A ratings – were among those on "credit watch."

Other triple-A countries include Austria, Finland, Luxembourg and the Netherlands. There is now a one-in-two chance they could see their credit rating fall within 90 days.

S&P put Cyprus under review earlier, the Associated Press reported, so now the only country in the 17-member currency bloc not on credit watch is Greece, which already has the world's worst rating.

Despite the mass downgrade warning, S&P, an American agency, said it expected to conclude its review soon after this week’s EU summit in Brussels on Friday, the Financial Times reported.

Reacting to the news Tuesday morning, French Foreign Minister Alain Juppé told RTL radio that France was taking the warning seriously.

"We know that we have more efforts to make than others, that's certain. It's a threat, it's not a decision. Of course it must be taken seriously."

Markets had been ready for France to be potentially downgraded - but few expected Germany’s rating to questioned, the Financial Times reported.

Both France and Germany have the greatest exposure to European debt.

According to the Financial Times:

S&P’s move at such a sensitive stage in negotiations is likely to spark further recriminations following ongoing political criticism about the behaviors of rating agencies during the crisis. They stand accused by many politicians of exacerbating the crisis and are facing stringent new regulation.

A French or German downgrade could threaten the European Financial Stability Facility, Europe’s bailout fund, the Wall Street Journal reported.

The German chancellor Angela Merkel and the French President Nicolas Sarkozy have been fine-tuning their proposals to save the single euro currency.

They are to present a new so-called EU "fiscal union" to other European leaders at the Brussels summit.